Downtowns around the nation are witnessing a boom in high-rise apartment construction. This year, at least 74 rental towers are on pace to be completed, with 81 more on the books for 2015 -- the highest number since the 1970s, reports Axiometrics. An apartment tower is defined as 15 stories or more. Meanwhile, strong apartment rents coupled with sluggish demand for office space has resulted in some high-rise buildings being converted to rental apartments. Overall, the growth has been greatest in denser, pricier markets such as Chicago, New York, and San Francisco. However, in percentage terms, the increase has been most dramatic in such smaller cities as Austin and Minneapolis, which is building apartments at the fastest pace in decades. For its part, Houston has eight apartment towers on track to finished this year and in 2015 versus just a half-dozen from 2005 to 2012. Mark Humphreys, CEO of Humphreys & Partners Architects, observes, "It's the 'Manhattanization' of America and it's happening in cities that never had rental high rises."

The growth in new rental towers, most of which are woven into downtown office centers, is primarily being driven by young professionals beginning their careers and empty nesters who are downsizing from larger homes in the suburbs. Together, these two demographic groups are helping downtowns evolve from places centered mostly on workplaces and entertainment venues to more complete neighborhoods that feature everything from supermarkets to community centers to community services. Rents are even setting new records. Despite the new supply, Minneapolis' downtown rents climbed 9 percent in 2013. Meanwhile, the vacancy rate was 4 percent as of Dec. 31, notes Marquette Advisors -- an increase from 1.9 percent the year before. But the city added close to 1,000 rental units over the year. The apartment boom has helped to offset a weak market for high-rise office development. Of course, the risk for developers there and in other similar markets is that they overdo it, building too may apartments and causing rents to decrease.

According to a new national consumer survey from loanDepot, fear that they are ineligible for financing has kept 46 percent of today's potential home buyers from pursuing a mortgage. The private, independent retail home loan lender determined that 29 percent of Americans say they would like to buy in the next couple of years, and one in five who already own a home say they would like to buy another residence in the next two years. However, 56 percent of all buyers who do not own a residence today but want to say they are not pursuing this goal out of concern that they will be turned away for a mortgage. While 71 percent of all Americans who want to buy a home in the next two years will require financing, the study adds, 89 percent have not actually taken any steps to see if they could qualify for a home loan. LoanDepot President and COO Dave Norris states, "We're well into this year's home buying season and too many potential buyers and sellers are sitting on the sidelines because they're afraid they can't qualify for a home loan before they've looked into it."

RealFacts is reporting that apartment hunters have a myriad of options in the Albuquerque metropolitan area as the first-quarter occupancy rate at larger communities dipped to the lowest level in over a decade. According to the study, the local apartment sector began 2014 with an occupancy rate of 91.7 percent, a decline from 93.1 percent a year earlier. Considering that RealFacts' results are based on occupancy at larger apartment communities, the low rate likely stems from continued job losses in the local market couples with competition from formerly owner-occupied, single-family houses turned into rentals. Out of 39 metros tracked by RealFacts, Albuquerque was one of 19 metro apartment markets to see a drop in occupancy in this year's January-through-March period. The local occupancy rate of 91.7 percent was tied with Jacksonville as the second lowest in the United States. Indianapolis placed at the bottom with a 91.2 percent rate.

Five Factors Make Greenville a Top Market for Apt. InvestmentDigested From "Apartment Growth Spreading Into Greenville Suburbs" Greenville News (SC) (04/27/14) Davis, Angelia

A recent UBS report ranked Greenville, S.C., as one of the country's top metro areas for apartment investing. The Swiss global financial services giant evaluated five key factors -- the job market, population and personal income growth, net unit absorptions, vacancy rates, and existing rental inventory -- in determining where the best risk-adjusted potential multifamily housing investment opportunities exist. In May 2009, a total of 548 new rental units were started in the area. After that, construction practically stopped because of the recession, notes Real Data, a North Carolina-based apartment research firm. As the economy began rebounding, however, Greenville saw very strong multifamily growth, notes AXIOMetrics Inc. The Texas-based firm, which also tracks multifamily housing trends, said 1,237 new apartments were delivered last year. Supply absorbed at around 21 apartment units per community per month. The absorption rate has dropped this year to an average of 11 units absorbed per property per month, AXIOMetrics researchers observe. For the first three months of this year, Greenville had an annual effective rent growth of 1.2 percent with an occupancy rate of 93.8 percent. That was good enough to rank the Greenville metro area 69th out of AXIOMetrics' 121 metropolitan areas surveyed. Charles Dalton, Real Data principal, said demand for apartments "is kind of easing back a little bit to a more sustainable level, but it's still very healthy."

More and more people are eschewing Boston's increasingly inflated rental apartment market for less expensive suburban digs. It's no surprise that this practice has widened the supply and demand gap in the suburbs in favor of apartment owners, many of whom are charging record high rents in such markets as Chelsea, Cohasset, and Needham. At the end of February, median rents nationwide had risen 2.8 percent to $1,310 from a year earlier. However, that pales in comparison with the steep rental costs in many communities throughout Eastern Massachusetts, reports Zillow Inc. February median rents in Revere, for example, climbed 10.8 percent to $2,026 a month. Even with a moderate 2.4 percent increase during the month, Quincy's median rent was still $2,041. Reis Inc. senior economist Ryan Severino concludes, "The [apartment owners] know the demand is high, so they're extracting every single penny they can from [residents]. . . . The most desirable parts of the market get really pricey, and some people get priced out and move to less desirable locations."

According to the latest Reis Inc. research, Pittsburgh's apartment vacancy rate for the first three months of this year tightened slightly to 3 percent. Meanwhile, average rents in Steeltown remained above $900 per month. The report stated: "Reis expects approximately 183,000 new units to be completed this year, with most coming online in the third and fourth quarters. This is well above the long-term historical average of 125,000 units per year." Due to this rebalancing of demand and supply, Reis researchers expect vacancy trends to be more or less flat for the remainder of this year. Rent growth is projected to remain in the 3.3 percent to 3.5 percent range, supported by Class A apartment communities with higher-than-market-average rents coming online.

Three Reasons Why Two L.A. Firms Bought Four Tulsa CommunitiesDigested From "Four Tulsa Apartment Complexes Purchased for $32 Million by Los Angeles Firms" Tulsa World (04/24/14) Evatt, Robert

Oro Capital Advisors LLC and Apartment Income Investors Inc. have bought four Tulsa apartment communities for a combined $32 million. Oro Capital principal Steve Firtel said the two Los Angeles firms involved in the venture believe Tulsa is a prime area for current and future apartment investment for three reasons. He stated, "It's got stable economic indicators, a growing economy, and a growing population base." Oro Capital Advisors LLC purchased a 75 percent interest in the properties, and Apartment Income Investors Inc. will own the remaining 25 percent stake. According to Firtel, the groups are especially attracted to Tulsa for its relative stability during the latest real estate and economic boom and bust, in addition to the new Macy's distribution center. That facility will employ over 1,000 people when construction is completed in a couple of years.

Nashville Company Buys More Louisville ApartmentsDigested From "Nashville Company Buys More Louisville Apartments" Louisville Business First (04/23/14) Lammers, Braden

Nashville-based Elmington Capital Group LLC has bought its fifth Louisville apartment community, paying $6 million for the Hampton Place Apartments west of downtown. Ben Brewer, senior vice president of acquisitions for Elmington, said the acquisition is part of the commercial real estate development and investment firm's strategy to expand in this particular market where he says the apartment sector is very strong. He states, "We believe with a lot of the growth happening in the West End, we believe there is a lot of money coming back into that area." Reed Weinberg, president of Louisville-based PRG Investments, says interest from such non-local players is a indeed good indicator for the West End. He remarks, "It's good to see out-of-state people making investments in West Louisville. I think it speaks to the confidence of that market. They see the trends of things improving there." The Hampton acquisition increases Elmington's total footprint in Louisville to around 750 rental units. By the end of December, Brewer believes Elmington will own 1,000 total apartments in and around the city.

AIM 2014: Conspire announces this year’s power panel line up of apartment industry executives set for an intimate look at the state of multifamily marketing. Addressing integration, changes in mobile and web strategy, you’ll get the marketing low-down from the perspective of multifamily management and ownership leaders including Kettler Management president Cindy Clare, Related Management president Jeff Brodsky and Alliance Residential COO Brad Cribbins.

Just prior to the AIM keynote on Tuesday, May 6, these industry thought leaders will join Joshua Tree Conference Group executive producer Steve Lefkovits for a no-holds barred discussion reflecting on the power of brand, the opportunities and challenges of online apartment marketing in the 21st century, and the evolving importance of the marketing department to executives and owners and presidents from leading multifamily firms.

The National Apartment Association Education Institute (NAAEI) has chosen Melissa White, director of marketing and training for Marietta-based GFI Management Services Inc., as the recipient of the first Alexandra Jackiw Leadership Scholarship. The scholarship supports leadership training for minority employees working in the apartment sector. As recipient, White will attend free of charge the two-day NAAEI Leadership Experience: Powered by Dale Carnegie course, which will be held from April 30 to May 1 in Baltimore and teach mid-level managers how to successfully lead and motivate. The course will cover everything from developing personal leadership to delegating and building trust -- skills that are essential for moving into mid-level management roles in the multifamily housing industry. Additionally, White will have the opportunity to travel and meet with the scholarship's namesake for an in-person mentoring session. Jackiw was the 2013 NAA Chairman of the Board.

New research shows that Twitter is managing to hold on to more of the teenage demographic than Facebook, even though the latter continues to rank as the biggest social network on the planet with more than 1 billion users. According to a global survey of over 40,000 Internet users by GlobalWebIndex, the percentage of teens active on Facebook decreased by 9 percent last year, but only 3 percent on Twitter. Furthermore, Piper Jaffray's "Spring 2014" survey of 7,500 U.S. teens found that Twitter is also the preferred social network by 27 percent of adolescents compared to 23 percent for Facebook. Teens use Facebook to send party invites and communicate with their families. By contrast, they use Twitter to communicate with each other via instant messaging and posting images. Jason Mander, head of trends at GlobalWebIndex, reasons, "Twitter hasn’t been around for as long as Facebook and also has a younger age profile in terms of its active users, making it feel a little more relevant for some younger users." It should be noted that Twitter gets nearly 75 percent of its advertising revenue from mobile, while Facebook mobile ad revenue currently hovers around 59 percent. Facebook, though, continues to tower over Twitter with regards to total number of users. Indeed, the micro-blogging site has yet to turn a profit and has just over 240 million users versus 1.2 billion for Facebook. Looking ahead, both Twitter and Facebook will face competition from an array of popular apps. Mobile messaging apps experienced rapid rises throughout last year, led by picture-sharing app Snapchat (up 60 percent). This is one of the main reasons why Facebook recently spent $19 billion on WhatsApp, which recently hit 500 million users. Prior to that, it paid $1 billion for the Instagram photo-sharing site.

How the 100,000 Homes Campaign Helps Folks Move Into ApartmentsDigested From "Tenants Move Into Apartments After Receiving Help from Harrison County 100,000 Homes Campaign" WBOY-12 (Clarksburg, WV) (04/24/14) Anderson, Katie

In Harrison County, W.Va., five formerly homeless people received the keys to their new apartments last week thanks to the 100,000 Homes Campaign. Their new building is located in Clarksburg and will boast 31 apartments when complete. West Virginia Coalition to End Homelessness Executive Director Zach Brown said other counties and municipalities should take notes from this success. He remarks, "They have one mission. They see the folks experiencing homelessness as 'our folks that we need to help collectively.' It's not something that can't be duplicated in other places and that's what gives us hope and it provides such a great example for what can be." The ultimate goal of Harrison's 100,000 Homes Campaign is to end homelessness locally.

Just How Pet Friendly Is This New Md. Apartment Community?Digested From "New Bethesda Apartment Pitches New Definition Of Pet-Friendly" Bethesda Now (04/24/14) Kraut, Aaron

In suburban Maryland, the new Gallery of Bethesda apartment community is hosting a grand opening of its pet spa and dog park on May 3. The two-hour event aims to portray The Gallery as a "highly pet-friendly" property, states assistant property manager Andrew Davies. Vantage Management, The Gallery's property manager, said the building has installed slip-proof stairwells designed to accommodate dog paws. When The Gallery is fully leased, the property manager will begin scheduling appointments at the in-house pet spa. According to Davies, there are also plans in the works to incorporate a dog run -- increasingly common on the rooftops of newer apartment buildings nationwide -- so that residents will not have to take the elevator downstairs and back each time they need to take their animal out for a quick walk. The May 3 event will last from 1 p.m. to 3 p.m., with the Humane Society on hand to install free tracking microchips to all dogs and cats as well as host a pet adoption. Professional dog trainer Heather Stein has also agreed to conduct a free, one-hour obedience class, and Fido Fitness & Play will do a free exercise class for pets. There will also be free grooming.

Helped by growth in rental rates, AvalonBay Communities Inc. posted first-quarter 2014 core funds from operations of $1.63 per share that were 7.9 percent ahead of the year-before quarter's FFO per share. The year-over-year results were in line with the Zacks Consensus Estimate. Analysts note that improved results from AvalonBay's existing property portfolio along with leasing from its developed apartment communities have helped the REIT record such positive results. Total revenue during the first quarter rose 27 percent year over year to $400.7 million. Meanwhile, same-store rental revenues rose 3.7 percent year over year to almost $235 million due mainly to an escalation in average rental rates. In terms of construction activity, the REIT completed two communities in Houston and Bloomingdale, N.J., for a total capital cost of $119 million and broke ground on four communities in Seattle; Roseland, N.J.; Marlborough, Mass., and Northern Virginia. It also started redeveloping a couple of its existing communities containing 1,122 rental units for a total capital cost of $32.6 million. AvalonBay management projects second-quarter FFO per share to range from $1.62 - $1.66.

The Las Vegas Metropolitan Police Department is using bait apartments to catch criminals looking to commit burglary and other crimes. The program appears to be working, as Metro cops investigated more than 350 apartment burglaries during March -- an 18 percent decrease from December 2013. The criminals often break into apartments while residents are at work and steal everything from money to jewelry to TVs. By using bait apartments, Las Vegas authorities are attempting to fool crooks and get instant, live evidence of crimes. Metro Det. Greg Watkins says police have set up bait apartments throughout the valley to trap burglars and they are looking to spread the word around. "We have seen a significant drop in numbers as far as crimes, burglaries, grand larcenies, petty larcenies in complexes that we put them in within that month," Watkins states. He adds that it is becoming increasingly common that people living in your own apartment community are the ones most likely committing the crimes.

Approximately 300 disabled and elderly residents of two apartment buildings in Des Moines, Iowa, have won an agreement to pay a $2.45 million settlement in a class action over bedbugs. The accord stipulates that each plaintiff will get between $200 and $6,000 over an infestation that created habitability issues, resulting in loss of rent, loss of personal property, painful bites, and sleep deprivation. Lawyer Jeffrey Lipman, who represented the plaintiffs in the case, comments, "I think this puts landlords on notice that they cannot ignore bedbug issues. If they don't take care of it, if they don't warn consumers, they're going to be held accountable." Lipman expects to file another similar lawsuit in the Hawkeye State soon. At issue in the case was whether the apartment owner, allegedly aware of the bedbug problem, violated Iowa's consumer protection law by misrepresenting to residents that the rental units were habitable. The settlement must be approved by a judge before it is final.

The city of Indianapolis last week sued five apartment communities, dubbing them public nuisances due to safety and health problems and unsanitary conditions. Officials are petitioning a judge to hit the owners with punitive damages. Most importantly, the lawsuits are aimed at getting owners to bring their properties immediately up to code, not shut them down. Suing apartment owners is a step the city takes as a last resort when inspections and other compliance measures are ignored. According to Adam Baker, a spokesman for the City Department of Code Enforcement, "It's an unfortunate step, but a lot of times it's a necessary one. We are still working with the property owners to bring them into compliance."

Just When You Thought It Was Safe To Go Back in the Water: Sink or Swim: NAA Innovation Tank Contest Entry Deadline Extended

All it takes is one great idea for a product or business to win $5,000 in the Sink or Swim: NAA Innovation Tank contest, and would-be entrepreneurs now have until May 16 to submit their idea to take part in this first-of-its-kind NAA event held in conjunction with the 2014 NAA Education Conference & Exposition, June 18-21 in Denver.

Sink or Swim: NAA Innovation Tank features ABC reality hit TV show “Shark Tank” co-hosts (and NAA Friday General Session speakers) Barbara Corcoran and Daymond John (as well as a live NAA Education Conference audience) judging live pitches from three innovative NAA attendees at the Friday General Session.

After the three pitches have been made and the audience vote is tabulated, Corcoran and John, who’ve personally invested in dozens of entrepreneurs, will award one lucky winner $5,000 for their idea!

What are you waiting for? Invest in your company and your career today. Visit the NAA Education Conference website and remember: The only thing separating you from a giant stack of cash is one good idea!

Registration Now Open for 2014 Maximize: The Multifamily Asset Management Conference

Register now for the 2014 Maximize: The Multifamily Asset Management Conference—October 13-15 at the Amelia Island Plantation Resort in Amelia Island, Fla.—the industry’s only event dedicated to staying ahead of the ever-evolving operational curve. The new name for the hugely successful Apartment Revenue Management Conference reflects the important role that revenue management plays in professional apartment management.

It’s a win-win when your company participates in the 2014 NAA Survey of Income & Expenses in Rental Apartment Communities.

All participants receive a complimentary copy (a $599 value) of the final report which contains:

•Valuable information your staff needs to prepare for the upcoming budget season.•Detailed local market and national economic analysis that will help ensure accurate financial and benchmarking information for your company.•Data that will help you compare your community’s performance against your peers.

There are two methods for your company to complete the survey including using our designated Excel file to download data directly from your internal data systems or using our secure survey website.

Contact Janet Gora of CEL at 310-207-7328 to determine the best response method for your company (via Excel or Online). If your company has previously participated, be sure to contact Janet via email before you get started as she can also assist in pre-loading base property data for you.

Know what’s going on policy issues that affect the industry by reading the new Apartment Advocate e-newsletter. NAA Government Affairs’ flagship publication merges the AIMS Update and the HotSheet plus adds new content to give you an insider’s look at what’s happening in apartment industry advocacy.

If you received the AIMS Update or the HotSheet, you are already subscribed. If you wish to subscribe, contact NAA’s Carole Roper.

The National Apartment Association (NAA) is America's leading advocate for quality rental housing. NAA's mission is to serve the interests of multifamily housing owners, managers, developers and suppliers and maintain a high level of professionalism in the multifamily housing industry to better serve the rental housing needs of the public.

Event Highlights

Responding to the need for leadership training within the apartment industry, NAAEI has partnered with Dale Carnegie Training to deliver a world-class program called the NAAEI Leadership Experience....